RR No. 1-2005: Amends further pertinent provisions of RR Nos. 7-95 and 8-2002 relative to transactions exempt from VAT and the submission of Quarterly Summary List of Sales and Purchases

Summary

RR No. 1-2005 further amends RR Nos. 7-95 and 8-2002 on transactions exempt from VAT and on submission of the Quarterly Summary List of Sales and Purchases.

Key points

1. VAT-exempt sales of real property. Exempt sales include properties not primarily held for sale or lease in the ordinary course of business, low-cost housing with a price ceiling of P 750,000.00 per unit, and socialized housing with a ceiling of P 225,000 per unit. Sales by real estate dealers or lessors of house and lot and other residential dwellings valued at P 1,500,000.00 and below are also exempt effective January 1, 2005.
2. VAT-exempt lease of residential units. Lease is exempt if monthly rental per unit does not exceed P 10,000.00, regardless of aggregate rentals. It is also exempt if monthly rental exceeds P 10,000.00 but the lessor’s aggregate yearly rentals do not exceed P 750,000.00.
3. Other sales and services. Other sales, leases and services are exempt if gross annual sales and/or receipts do not exceed P 750,000.00.
4. CPI adjustment. Not later than January 31, 2006 and each year after, the P 1,500,000.00, P 10,000.00 and P 750,000.00 amounts are adjusted to present value using the CPI published by the NSO. The adjustment of the P 1,500,000.00 amount is published through Revenue Regulations not later than March 31 of every following year.
5. Quarterly Summary List. The list is filed with the RDO having jurisdiction on or before the 25th day of the month after the close of the taxable quarter. Large Taxpayers Service taxpayers and eFPS enrollees may file electronically on or before the 30th day.

Who is affected

• VAT taxpayers filing the Quarterly Summary List of Sales and Purchases
• Large Taxpayers Service taxpayers and eFPS enrollees (30th day deadline)

Deadlines and effectivity

• Exemption for residential dwellings: effective January 1, 2005
• CPI adjustment: not later than January 31, 2006 and each year after
• Quarterly Summary List: 25th day of the month after quarter close
• Electronic filing for LTS and eFPS: 30th day

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.